Questions to ask yourself before buying a vacation home
Did you fall in love with your last vacation destination and know that you absolutely must buy a home there so that you can recreate those magical experiences. You are not alone. According to the National Association of Realtors (NAR), vacation home sales catapulted to one of the highest totals since 2013.
Purchasing your own piece of paradise is an exciting opportunity, but there are many important factors to consider before taking the plunge and buying a vacation home. Following are a few questions you should ask yourself before buying a vacation home.
It’s time to go on vacation, so you drive two hours to the airport for a three-hour flight, pick up a rental car, and then drive two more hours to your dream cabin in the woods. Really?
Now think about hopping in the car and driving only three or four hours to your dream cabin in the woods. The enticement of owning a vacation home is that you will actually go on vacation…easily and often. The location, ease of access, and how often you plan on using it are paramount components in this endeavor. If it’s too far away, then you might not use it as much as you originally thought you would.
Is it going to be a yearly summer spot for extended family or a romantic weekend getaway? Will you need three bedrooms or is 500 square feet enough space?
Research the four seasons. Will it be too hot to go golfing in July? Do you want to participate in the local, yearly half-marathon? Having a clear idea of what you want, who’s going to use the home, and the purpose of it will be extremely helpful in the overall process.
You should also hire a local real estate agent to learn all the ins and outs of a particular area. Sure, you know how great it is in the summer, but did you know that every winter they shut down the roads due to flooding? Or how about the new sewer plant that’s being built down the road? Real estate agents are invaluable, and your local expert will share insights and interesting facts about the neighborhoods.
Make sure you fully understand the financial implications of owning a second home. Consult with your Certified Public Accountant and your financial planner. There are different tax rules that apply depending on the breakdown between personal and rental use. Keep in mind that there will be maintenance costs for upkeep and repairs on the home. Create a budget and be prepared for the expenses.
Taking time to research the necessary elements in buying a vacation home is smart and will go a long way in protecting your investment. This is your investment in creating experiences and unforgettable memories for you and your loved ones for years to come. Now, isn’t it time for a vacation?